Bill > S3245

Introduced Session

This bill requires the board of education of a school district, which offers a 403(b) plan to eligible school district employees, to select a minimum of six financial institutions or pension management organizations to provide investment services to the 403(b) plan. Under the bill, the board of education of a school district with a student enrollment of less than 1,000 students may select fewer than six financial institutions or pension management organizations to provide investment services to the 403(b) plan. A 403(b) plan, also referred to as a tax-sheltered annuity plan, is a type of defined contribution plan sponsored by public educational organizations. Under a 403(b) plan, employees may defer some of their salary, either on a pre-tax or after-tax basis, for deposit into individual accounts that can provide a source of income in retirement. In selecting financial institutions or pension management organizations under the bill, a board of education is to ensure that eligible school district employees are provided sufficient opportunities to invest in annuity contracts, which are generally investment options provided by an insurance company, or custodial accounts, in which moneys are invested in mutual funds. The board is also required to ensure that employees are offered self-directed investment options. The selection of financial institutions or pension management organizations under the bill is required to be a mandatory subject of collective negotiations between a board of education and an applicable collective bargaining unit. A financial institution or pension management organization that provides services to the 403(b) plan under the bill is required to provide certain data related to the investment of 403(b) plan funds and the fees, charges, expenses, commissions, compensation, and payments to third parties related to investments offered under the plan. The bill provides that a board of education and the majority representative of an applicable collective bargaining unit is not responsible for any investment loss or failure of an investment to earn any specific return for the services provided by the selected financial institutions or pension management organizations providing investment services to the 403(b) plan. Lastly, the bill stipulates that the ability of an eligible school district employee to deposit supplemental compensation for accumulated unused sick leave into a 403(b) plan account is to be a mandatory subject of collective negotiations.

AI Summary

Committee Categories

Vin Gopal (D)*,  Raj Mukherji (D)*, 

Introduced in the Senate, Referred to Senate Education Committee (on 05/16/2024)

Official Document